Business and Finance News Online

Monthly Archives: April 2010

Credit repair is very important for every individual and most of us really don’t know how it can be damaged or repaired. There are a lot of myths and misconceptions regarding credit and credit repair. Most of us don’t even bother to look into facts before it gets too late and the credit is gone beyond any possibilities of repair.

Here are some common myths about credit repair and the factual information that goes with them. It is important for everyone to understand what credit is and how it works.

You keep your credit history in good shape by paying your bills in time. If you are paying your creditors in time, they will send the positive information to the credit bureaus and this will definitely keep your credit scores up. Negative experiences and late payments cause the credit scores to go down. The higher the credit score, you have a very good chance of getting decent interest rates from the future lenders while applying for loans and credit lines.

Common myths regarding credit repair

Myth#1: Credit can be repaired instantly:

There are many credit scams that will say that they will repair your credit instantly. Unfortunately, if you go with them, you will put yourself into many legal problems. By giving your personal information to a scammer, you will get victimized of identity theft. These scams operate by obtaining a new tax identification number for you, which is specifically reserved for businesses. This new number is a blank slate credit-wise, but if you use it instead of your own identification number you can be charged with fraud.

Myth #2: You Can’t Check Your Own Credit:

Many people think that they cannot check their credit report or order a report by calling the credit bureau. They think that they have to hire some kind of credit reporting service to get the free copy. There are many companies who offer free credit reports after you sign up for their trial service. If you don’t cancel within the trial period, they will charge you a very high price for the credit report ordered within the trail period.

Myth #3: You Can’t Fix Bad Credit:

There are many people who think that credit tarnished after a certain point cannot be fixed. The fact is that any credit can be fixed with timely and careful payments of the debts. Unpaid accounts that are past the seven years reporting timeframe will be automatically removed from your credit report. You need to concentrate on the newer debts and make sure that they are paid on time. Even the worse credit will slowly but surely begin to improve.

Myth #4 – Bankruptcy Is an Easy Way Out:

Most people think that getting the debts discharged through bankruptcy is an easy way to come out of debts. Recently, the bankruptcy laws have become strict and even if you are able to file for it, getting new credit in the beginning years will be pretty tough. Bankruptcy will bring down your credit scores and you will have to work very hard to reestablish new credit, especially when the lenders are not willing to offer any new credit.